Ohio State Teachers Retirement System Forensic Investigation Has Been Funded
After a 3-month campaign of collecting donations from retired and active members of Ohio State Teachers Retirement System (STRS), the Ohio Retired Teachers Association (ORTA) this week reached its goal of funding a forensic investigation of the teachers’ pension—an investigation which I have agreed to conduct.
Since its beginning in 1947 OTRA has served as the voice of Ohio’s retired educators. ORTA advocates and promotes the improvement of pensions and benefits and services available to Ohio’s retired educators. The greatest source of concern for STRS retirees, says ORTA, is the reduction, then loss of a promised cost of living increase (COLA) that retirees experienced beginning in 2013. Despite language in the Ohio Revised Code that provided for retiree benefits to increase over the course of an individual’s retirement, the STRS Board of Trustees reduced the benefits to retirees to zero in 2013, reducing it from 3% to 2% for the 2014, 2015 and 2016 fiscal years, then eliminated the COLA for the next five fiscal years beginning July 1, 2016. These reductions in promised and guaranteed benefits have resulted in significant financial injury to STRS retirees, according to ORTA.
The losses to retirees were also coupled with a 40% increase in active educator contributions to the pension system and a requirement to work longer prior to receiving benefits. In short, active teachers are paying more, working longer, and receiving less than what was promised. Retirees are receiving less than what was promised and written into Ohio law.
ORTA notes that the stock market is at an all-time high and the STRS’ predictions indicate that there will be no increases in retiree benefits over the next 15 years.
Faced with ‘no end in sight’ to the current situation ORTA was approached by some of its members to investigate the possibility of getting an outside expert to conduct a forensic audit of the pension system. After identifying an expert to provide such a “second opinion,” ORTA agreed to serve as the fiscal agent for a grassroots fundraising campaign to raise the the money to conduct the audit.
ORTA hopes the independent forensic investigation will provide some assurance to its members that their pension system is being managed properly and that the investments are being reported accurately. Unfortunately, says ORTA, the level of trust from STRS members (active and retired) is low. “Our hope is that an audit by an outside expert, as opposed to a review by a longtime paid consultant will provide that level of trust a retiree should have with their pension system. The investigation will review whether the assets held by STRS are being reported accurately, and what the fees are for managing those assets.” Additionally, it will look for potential conflicts of interests, mismanagement and disclosure failures.
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For more information on how to protect your pension, see Who Stole My Pension?